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The Recruitment & Employment Confederation - The Voice of the Recruitment Industry

Gangmasters Licensing

  


Introduction


It is now an offence to provide labour into agriculture, shell fish gathering and associated processing and packaging industries without holding a gangmasters license obtained from the Gangmasters Licensing Authority. It is also now an offence for any business or undertaking within the sectors covered by the Gangmaster Licensing Act 2004 to use labour supplied by an unlicensed labour provider.

  

The law 


The Gangmasters Licensing Act 2004 (the Act) became law in July 2004. In April 2005 the Gangmasters Licensing Authority (GLA) was established to implement, administer and enforce gangmaster licensing.

Under the Act if you provide workers to do work in the following sectors you are a gangmaster within the meaning of the term under the Act and required to hold a gangmasters licence:

Agriculture, including:

  • Horticulture;
  • Commercial forestry;
  • Dairy farming;
  • The production of consumable produce (whether or not for profit);
  • The raising of animals that will enter the food chain;
  • The use of land as grazing, meadow or pasture land.

Processing and packaging of:

  • Any product containing an agricultural component (including fresh and processed products but not including non food items such as cosmetics);
  • Any drink that contains an agricultural component (e.g. sugar, hops, fruit, milk etc..);
  • Any animal product that will enter the food chain;
  • Shellfish, fish or products derived from shellfish or fish;
  • Plants, flowers, bulbs etc.;
  • Pet and animal feed.

Gathering shellfish.

If you are doing any of the following you do not need a license

An employment agency or business which provides workers to:

  • Process and pack products which, even though they include an agricultural, fish or shellfish component, are nevertheless non-food products e.g. cosmetic products, paint brushes (which use pig hair) etc.;
  • Process and pack in the retail sector e.g. in butcher shops, bakeries, farm-shops, supermarkets, farmers markets etc.;
  • Work in a distribution warehouse (where for example food products might be held for distribution to supermarkets and other retail outlets);
  • Work in an educational establishment providing a recognised qualification e.g. NVQ – such as a cookery school;
  • Work in a catering establishment including farm restaurants/tea rooms/shops, school kitchens, restaurants, bars, sandwich shops etc., (however please note that those supplying workers to assemble ready meals for airlines, train or bus companies do not fall within this category and will require a licence);
  • Employers for direct employment as skilled agricultural workers such as sheep shearers, relief milkers, shepherds etc.;
  • Operate agricultural machinery e.g.  combine harvesters, hay bailers etc.;

A farmer who;

  • Occasionally loans a worker to another farmer;
  • Is party to a share farming agreement and does work for or provides workers to another farmer as part of that agreement;
  • Makes a one-off loan of a worker, provided to him by a gangmaster, for a period of less than 2 weeks’ work, provided the gangmaster has given permission;
  • Provides a worker to assist a contractor who is providing an agricultural machinery service to him;
  • Is a sole operator under SAWS and provides a worker(s) to other operators under the SAWS schemes;
  • Is a licensed slaughter-man and provides workers to undertake the slaughter of animals.

Any labour provider wishing to operate in the licensed sector must apply for a gangmasters licence under the Licensing Standards.  These are the criteria that a gangmaster will have to meet in order to obtain a licence from the GLA. They identify the specific areas where a Labour Provider will need to demonstrate they are compliant.

The complete range of standards is available here >. You can check against the standards to assess whether your business is ready to apply for a licence or if any changes may have to be made to your business before you submit your application.

The Licensing Standards will not be used in isolation. The GLA also uses information from other sources, including other government departments, to check that a licence holder or applicant is meeting the GLA licence conditions. 

These can be downloaded from the GLA’s website at http://www.gla.gov.uk/index.asp?id=1012789. 

Labour providers awarded a license with conditions attached or who are refused a licence or have a license revoked, can appeal the decision of the GLA under the Gangmasters (Appeals) Regulations 2006: http://www.opsi.gov.uk/si/si2006/20060662.htm.
 
A member recently appealed against a condition on their licence requiring them to pay for all PPE provided to the temporary workers they supplied.  A note of the outcome of the appeal can be found in the appendix at the end of this document.

The scope of the gangmaster legislation


 An REC survey back in 2003 showed that 70% of the industry wanted a return to licensing. The DTI  have no intention of re-introducing licensing for the industry as a whole but DEFRA have done so for those operating as ‘gangmasters’ as defined by the Gangmasters Licensing Act 2004: i.e. supplying workers to do agricultural work, gathering shellfish, fish or products derived from shellfish or fish. Agriculture is defined widely to include dairy farming and horticulture i.e. gathering or harvesting of forestry, market gardens, orchards etc.  

Since the implementation of gangmaster licensing the GLA has made comments with regard to extending gangmaster licensing to other sectors such as construction and hospitality.  In principle the REC is not against this idea but we do not consider that it is appropriate to consider any such move at this time.  First we need to see real evidence that the gangmaster licensing scheme as it currently stands is effective.  There also needs to be tangible, as opposed to anecdotal evidence, of abuse in other sectors such as would justify the introduction of the gangmaster licensing scheme to those sectors.
 
The term gangmaster has been misleading because historically it has been associated with activity on the fringes of legality.  The professional end of the labour provision market, even where it was supplying into the sectors covered by gangmaster licensing, was slow to recognise itself as being caught within the definition of gangmaster, particularly since such businesses openly recognise and accept they are already regulated by the Employment Agencies Act 1973 and the Conduct of Employment Agencies and Employment Businesses Regulations 2003 (from which the Gangmaster Licensing Conditions rules are taken) and therefore represent an entirely different type of business than that operated by what was traditionally referred to as a gangmaster.


The REC’s role in gangmaster licensing


The REC took a leading role in representing the views of the recruitment industry on the formation of this licensing scheme. Click here to read more about the Gangmasters Consultation that the REC conducted in the period between 2004 and 2006. 

  

Contact

If you have specific questions relating to gangmaters licensing you may find it helpful to contact the Gangmasters Licensing Authority helpline on 0845 602 5020 .

 

 

 

 


APPENDIX

Temporary workers and personal protective equipment

In a recent appeal by a labour provider against a condition on its Gangamaster License under Licensing Standard 6.6 requiring the labour provider to pay for personal protective equipment (which in this context essentially means industrial boots) required by the workers whose services they supply to labour users, the Appointed Person handed down the following decision:

“That the appeal be allowed and that the condition under Licensing Standard 6.6 to the licence dated 17th October 2006 (MILE0001) be modified.

Summary Statement of Reasons

1. The appellant provides workers in circumstances protected by the Gangmasters (Licensing) Act 2004 (“the Act”) and regulations made thereunder.
2. The definition of “worker” in the Act does not differentiate between employee, self employed person or other category of worker.
3. European Directive 89/391/EEC (“the Directive”) provides by regulation 4.6 that
Personal protective equipment shall be provided free of charge by the employer……

However, Member States may provide, in accordance with national practice, that the worker be asked to contribute toward the cost of certain protective equipment in circumstances where use of the equipment is not exclusive to the workplace.

4. The Directive has been reduced into domestic law by the Personal Protective Equipment at Work Regulations 1992 (“the Regulations”). The Regulations provide that
Every employer shall ensure that suitable protective equipment is provided to his employees……..   and

Every self employed person shall ensure that he is provided with suitable protective equipment………

5. It is significant that the Regulations are silent on the issue of who bears the cost of the PPE.
6. The purpose of the Act is to ensure that workers (as defined) are protected in the workplace in the same way as employees and self employed persons.
7. The Directive envisages circumstances in which it would be inappropriate for workers to bear the cost of PPE, namely where there is a national practice and the use of the PPE is not exclusive to the workplace.

FINDINGS IN RELATION TO THE ALLEGED BREACH OF LICENSING STANDARDS

8. Common sense and national practice indicates that a worker will provide PPE the use of which is not exclusive to the workplace.
9. In the interests of justice and fairness, the condition imposed against Licensing Standard 6.6 be accordingly modified.


CONCLUSIONS

That the condition imposed against licensing standard 6.6 be modified as follows, namely:-

“The Labour Provider may seek a contribution from the worker for the cost of PPE the use of which is not exclusive to the workplace, limited to the cost to the Labour Provider of that PPE.””
Since this decision was handed down, both the HSE and the GLA have issued statements setting out their interpretation of this judgment.

The HSE’s position

Following the decision the HSE wrote to the REC in the following term:

The decision in this case does not alter the view we set out in our letter to you of 25th April.  (A copy of this letter can be found on the REC website on the gangmasters pages).  HSE regards the principles that lie behind GLA Licensing Standard 6.6 as sufficient to cover the varied circumstances of labour provider/user arrangements,
The second paragraph of Article 4.6 of the 'PPE Directive' was permissive ('...Member States may...').  HSE opted, after consultation, not to transpose this into UK domestic law, as it was entitled to do, so no right exists for employers or others to ask workers to contribute toward the cost of protective equipment 'not exclusive to the workplace'.  Notwithstanding, we reiterate the view set out in our earlier letter that 'not exclusive to the workplace' cannot reasonably be made to bear the meaning REC seeks to give it in recent press articles commenting on the case.  In this context, we also note that the decision of the Appointed Person in this case is not binding.

As we said in our previous letter, you may wish to consider issuing guidance to your members re-emphasising the above points.  Any who did seek a contribution from workers could be held to be making a charge, and may be vulnerable to legal challenge.

The GLA’s position

In the recent appeal case against the GLA decision to attach an additional condition to a licence in relation to licensing standard 6.6 and charging for Personal Protective Equipment (PPE), the appeal was upheld, with the Appointed Person concluding it is appropriate for labour providers to "seek a contribution from the worker for the cost of PPE the use of which is not exclusive to the workplace, limited to the cost to the labour provider of that PPE."
What does this decision mean for other licence holders and licensing standard 6.6?
Contrary to some media reports, LS 6.6 will not be changed. The appeal decision is consistent with the current law, which prohibits charging for PPE in any workplace (it is not restricted to just a single workplace that the worker may be assigned to). What will change is that LS 6.6 will not apply where a worker contributes to the cost if the PPE is used for non work purposes.
Where PPE is required, it should be free of charge for any work purpose. In light of this decision, you may wish consider the control and return of PPE when workers leave your employment. For example, the written terms and conditions with the worker could stipulate that the PPE is the property of your business and should be returned when the individual leaves your employment. If the PPE is not returned, the cost of the boots could be recovered through the final payment of wages. Alternatively, you may give the worker the option to buy the PPE from you at the end of the assignment at same price as the cost to you.
If you have any queries, please contact the GLA Helpline on 0845 602 5020
The REC’s position

The GLA and the HSE believe that employment businesses should provide PPE to temporary workers they supply free of charge in all circumstances.  Both institutions allow for the recouping of the cost of PPE if it is not returned by the worker at the end of an assignment. 

The REC is not convinced that this view would be upheld in the courts as its interpretation of the law differs considerably from the interpretation placed on it by the HSE and, by extension, the GLA. 

The GLA state that the Appointed Person’s judgment is consistent with the interpretation that only where PPE worn in the workplace is intended for both workplace and home use can it be charged for; e.g. leisure centre workers who wear trainers for work but also use them for their own personal use outside the workplace.

The REC believes the judgment is broader than this.  While the REC agrees with the GLA’s view so far as it goes, we also interpret the above decision as meaning that where PPE is being worn by a worker in several workplaces but that PPE is not exclusive to any one of them, as indeed would protective footwear not be when worn by temporary workers supplied into several labour users by a labour provider or several labour providers, it can be charged for as long as the labour provider does not charge the worker for the PPE at a profit and does not make any deductions from wages that would take that worker below the National Minimum Wage.  In the context of the case in question and the fact that the Appointed Person allowed the appeal of the labour provider seeking to do just this, we would suggest this is the meaning the Appointed Person gives to his own judgment. 

The GLA has not appealed the Appointed Person’s decision but has instead interpreted the meaning of the decision in such a way as to allow it to continue as before in relation to Licensing Standard 6.6. 

The HSE makes the point that article 4.6 of the ’89 Directive is permissive, which means that the Governments of Member States had a discretion as to whether to include it in their national legislation.  It then states that the UK Government deliberately excluded this provision from UK law when the Directive was transposed.  We do not agree with this.  On the question of whether a variety of labour providers supplying the services of temporary workers for short periods to a variety of labour user sites should be required to pay for the PPE required by the workers, the UK legislation is not prescriptive but neither is it prohibitive and we would say the reasons for this have their roots in common sense.  The provisions of the Personal Protective Equipment at work Regulations 1992 provide that employees (i.e. those employed under a contract of employment) must be provided with necessary PPE at work by their employer.  By prescribing which party must provide the PPE the Regulations place a particular meaning on the word Provide, i.e. in this context the implication is that provide means give. 

Regulation 4(2) of the same regulations makes provision for workers insofar as they are not employees (termed self employed) as follows:

(2) Every self-employed person shall ensure that he is provided with suitable personal protective equipment where he may be exposed to a risk to his health or safety while at work except where and to the extent that such risk has been adequately controlled by other means which are equally or more effective.

This provision is not prescriptive as to who must provide them and so in this context “ is provided with” cannot mean “be given”.

Where health and safety law is directed specifically at labour providers and temporary workers who are not employees, it is prescriptive only insofar as to ensure that the information workers are given prior to work starting is adequate in relation to the health and safety risks inherent in a particular assignment as well as to the protective measures that are in place or that must be taken in the circumstances.  The REC’s health and safety guidance for members can be found in the  REC Legal Reference Guide on the REC website and should be carefully followed.  The crucial point is that the health and safety reality of the working conditions that a temporary worker is working under should be no different from those an employee of the labour user is afforded (provided always that those conditions are compliant) in the same or similar circumstances.

Summary

The decision of the Appointed Person set out above does not set a precedent because it was not a decision of one of the higher courts.  Equally it has not been appealed by the GLA.  Interpretation of the point therefore remains open.